Taoiseach dampens expectations of giveaway budget

Taoiseach Leo Varadkar has moved to dampen expectations of a giveaway budget and says he will not be making the “mistakes of the past”.

He suggested that Budget 2019 will be prudent, with the Government focused on bringing down debt.

He hit out at previous governments led by Fianna Fáil, which he accused of boosting spending and cutting taxes too rapidly.

“That gave rise to the economic crises that we had for so long and formed the foundations of the housing crises that we’re still now facing,” said Mr Varadkar.

The Government is expected to have substantially more wriggle room this year, with around €2.7bn available in October’s budget giving extra scope to reduce taxes or pump money into infrastructure and services.

Mr Varadkar said: “The first priority when it comes to framing the next budget has to be to build on what’s been achieved in recent years and that is eliminating the deficit, bringing down our debt as a country.”

He said it is important to be able to deal with economic shocks or a slowdown in the economy if they should occur. “I don’t want to repeat the mistakes of the past — and the most obvious mistake that was made in the past was that when the economy was going well, governments, led by other parties, decided not to do the right thing.”

While Fianna Fáil leader Micheál Martin has indicated his party will support the budget, provided some demands are met, it is understood it has dismissed any idea of a gentleman’s agreement that would prolong the confidence and supply agreement by six months.

The Irish Examiner understands that Fianna Fáil will demand a rainy-day fund be prioritised and delivery of pay restoration to workers in section-39 organisations. They see health and housing as “red-line issues”.

Mr Varadkar said the next budget is still too far away to know what it will include — adding that Finance Minister Paschal Donohoe will only know the parameters of the budget once the summer economic statement is published.

“The most important thing from my point of view is prudence,” said Mr Varadkar.

He added that “balancing the books” is the priority and, after that, it will be about finding additional funding for infrastructure, public services, and “finding twice as much money for that as we do for tax release”.

Meanwhile, Agriculture, Food, and Marine Minister Michael Creed is to update his colleagues on the ongoing fodder crisis when the Cabinet meets today.

Mr Creed last week announced a €1.5m support scheme to help with the importation cost of hay and silage. He is also due to meet with some of the main banks today to discuss ways of alleviating the short-term financial pressures of the fodder shortage.

Health Minister Simon Harris will also bring two memos to Cabinet today, including one which will give carers a GP visit card.